• By Ellen Golden
  • October 27, 2009

dw_learnDear DailyWorth,

My family of four has health insurance through a group of small business owners.  Our Health Savings Account keeps the monthly bill lower than an HMO, but I feel vulnerable. What should I do?

~ Susan G, New York City


Health-insurance expert Ellen Golden of Atlantis Health Plan helps individuals, sole proprietors and small businesses in New York City find health insurance.

Dear Susan, I can appreciate your feeling vulnerable!

What's an HSA?
Health Savings Accounts (HSAs) are a type of savings account offered in conjunction with low-premium, high-deductible health insurance plans. Anyone can open an HSA at a qualified financial institution. Your HSA money goes in pre-tax, grows tax-deferred and is withdrawn tax-free when used for qualified medical expenses. The maximum savings you’re allowed (single/family) is set by the federal government, as is the maximum deductible (single/family) charged by your Health Insurance Plan. Also your Plan can add additional charges, such as co-insurance on top of the deductible. Preventive care expenses may be covered before deductibles are met.

Make Sure You're Using It Right
It's true that a Health Savings Account (HSA) can keep your monthly premium down and, if used properly, can be a sensible option.  However, used incorrectly, an HSA can get you into a financial bind. To be safe, find out both the deductible and co-insurance from your group’s High Deductible Health Plan (HDHP).  Co-insurance relates to cost-sharing between you and your health insurance company.

Have you put that amount of money in your HSA so that if you end up in the emergency room tonight you’ll be covered?  If so, then you’re using the HSA properly, and you shouldn't have to worry about being vulnerable. But if you don't have enough to cover those expenses, you could end up owing a lot of money – and be very vulnerable.

For more information about HSAs and HDHPs, and how they work, read this simple breakdown on the U.S. Treasury Department website.

Need Health Insurance Help In New York?
If you're an individual, sole proprietor or small business owner in New York, you can call Ellen Golden at 917-903-8627 or email her at EGolden1@atlantishp.com for help with your health insurance plan.

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